Amortization (25 vs 30 years)
Stretching your mortgage over 30 years instead of 25 lowers each payment but raises the total interest you pay, and who can get 30 years depends on your down payment and buyer status.
Amortization is the total time you're scheduled to take to pay a mortgage down to zero. It's not the same as your term (the length of one contract, usually five years, after which you renew). A longer amortization spreads the same loan over more payments, so each payment is smaller. That's the appeal. The cost is that you're borrowing the money for longer, so you pay more interest overall. On a $500,000 mortgage at 4.5%, going from 25 to 30 years drops the monthly payment by roughly $245, but adds close to $80,000 in total interest across the life of the loan. Same debt, lower monthly bite, bigger lifetime cost.
Who can actually get 30 years comes down to whether your mortgage is insured. If your down payment is under 20% of the price, you must carry mortgage default insurance (through CMHC, Sagen, or Canada Guaranty), and the loan is "insured." If you put down 20% or more, it's "uninsured" (also called conventional). Uninsured mortgages have long been allowed to run 30 years, at the lender's discretion. Insured mortgages were capped at 25 years for decades.
That cap changed on December 15, 2024. Insured mortgages can now run 30 years in two cases: you're a first-time buyer (buying any property type), or anyone buying a newly built home that's never been lived in. To count as a first-time buyer, you (or your spouse or common-law partner) can't have owned and lived in a home as your principal residence in the previous four years. So the old shorthand that "30 years is only for people with 20% down" is out of date. A first-time buyer with 5% down can now get it too.
Worth naming plainly: a longer amortization is often sold as making a home "more affordable," but it doesn't lower the price or the debt. It lowers the monthly payment by keeping you in debt longer and charging you more interest to do it. That can be a reasonable trade if the smaller payment is what lets you buy at all, or frees up cash flow you value more than the interest saved. Many lenders also let you prepay (lump sums or higher regular payments, usually up to 15-20% of the balance per year without penalty), which lets you take the 30-year payment as a safety floor while paying faster when you can. That combination is worth understanding before you sign, because the default 30-year schedule is the expensive one.